Every investor in Challenger Technologies Limited (SGX:573) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’
Challenger Technologies is not a large company by global standards. It has a market capitalization of S$162m, which means it wouldn’t have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don’t own shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about 573.
View our latest analysis for Challenger Technologies
What Does The Lack Of Institutional Ownership Tell Us About Challenger Technologies?
We don’t tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it’s not particularly common.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Challenger Technologies might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Hedge funds don’t have many shares in Challenger Technologies. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Challenger Technologies
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems that insiders own more than half the Challenger Technologies Limited stock. This gives them a lot of power. So they have a S$137m stake in this S$162m business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.